The preoptic area-anterior hypothalamus (POA-AH) is characterized by sexually dimorphic features in a number of vertebrates and is a key region of the forebrain for regulating physiological responses and sexual behaviours. Using live-cell fluorescence video microscopy with organotypic brain slices, the current study examined sex differences in the movement characteristics of neurons expressing yellow fluorescent protein (YFP) driven by the Thy-1 promoter. Cells in slices from embryonic day 14 (E14), but not E13, mice displayed significant sex differences in their basal neuronal movement characteristics. Exposure to 10 nm estradiol-17beta (E2), but not 100 nm dihydrotestosterone, significantly altered cell movement characteristics within minutes of exposure, in a location-specific manner. E2 treatment decreased the rate of motion of cells located in the dorsal POA-AH but increased the frequency of movement in cells located more ventrally. These effects were consistent across age and sex. To further determine whether early-developing sex differences in the POA-AH depend upon gonadal steroids, we examined cell positions in mice with a disruption of the steroidogenic factor-1 gene, in which gonads do not form. An early-born cohort of cells were labelled with the mitotic indicator bromodeoxyuridine (BrdU) on E11. More cells were found in the POA-AH of females than males on the day of birth (P0) regardless of gonadal status. These results support the hypothesis that estrogen partially contributes to brain sexual dimorphism through its influence on cell movements during development. Estrogen's influence may be superimposed upon a pre-existing genetic bias.